1982 PLP 359 (PTD)

This judgment will dispose of Writ Petitions Nos. 4935/80, 5474/80 5758/80 and 5753/80 as common question of law and facts are involved.

2. The petitioner manufactures chip‑board which was exempt of sales tax. The petitioners were nevertheless assessed to payment of the tax by the Sales Tax Officer for the years 1970‑71 to 1973‑

74. The petitioners filed an appeal against the assessment which was accepted by the Appellate Assis tant Commissioner of Income‑tax on 18‑2‑1978. The Department challenged the orders of appeal before the Income‑tax Appellate Tribunal but the appeal was dismissed on 31‑7‑1979. The respondents did not challenge the orders of the Income‑tax Appellate Tribunal any further. The orders thus attained finality. A grievance bas now arisen to the petitioners on account of a letter issued on 6‑5‑1980 by the Inspector, Central Excise and Customs, Gujran wala informing him that the chip‑board being manufactured in the petitioners' factory cannot be allowed free of sales tax as it cannot be used as substi tute of timber. The Inspector issued this letter on the strength of a letter issued on 26‑3‑1980 by the Second Secretary of Central Board of Revenue which in turn was forwarded to the Inspector by the Collector, Central Excise and Land Customs, Lahore.

3. The learned Deputy Attorney‑General who has appeared on behalf of the respondents has stated that writ petition was not . maintainable because it was premature as no assessment had yet been made and that in any case the petitioners bad departmental remedies available. He has also contended that the decision of the Appellate Assistant Commissioner and the Income‑tax Appellate Tribunal cannot stand in the way of the assessing authority four the succeeding years as every assessment year is a complete unit by itself and the earlier decisions do not operate as res judicata.

4. It is an admitted fact that the petitioners producing the same article which they have been producing in the years 1971‑72 to 1973‑74 regarding which a judicial determination was made in favour of the petitioner up to the level of Income Tax Appellate Tribunal. It is also an admitted position that there has been no change in the law during the period in question. It is obvious, therefore, that without any change in the nature of the product of change in the law the Central Board of Revenue had no authority to issue instructions to the contrary. According to our system of law a judicata determination can be avoided through a legislative process, but an executive authority cannot depart from it.

5. The learned Deputy Attorney‑General has strongly canvassed the argument that the principle of res judicata does not apply to taxation matters as every assessment period is a complete unit by itself. This principle cache up for discussion in the case of Commissioner of Income‑tax, last Pakistan, Dacca v. Wahiduzzaman (P L D 1965 S C 171). It was not held that the principle of res judicata is completely inapplicable to the cases before Income‑tax Authorities. They have in fact found that the principle is applicable but is hemmed in by certain limitations. These limitations are, the fresh availability of new grounds, and, the questions of law. The present case does not come up to these qualifications. The principle of res judicata will, therefore, stand in the way of the respondents, until the law is changed. The law was actually amended in 1981, after which the tax is being paid by the petitioner.

6. As to the question of alternate remedy, it is enough to observe that once disputed articles had been declared to be exempt from payment of sales tax the Central Excise Authorities could not refuse to clear the disputed articles without payment of any tax. In fact under the circumstances of the case when the tax itself could not be levied the action of the Inspector in issuing the letter on 6‑5‑1980 telling the petitioner that Chip‑Board manufactured by them cannot be allowed free of sales tax amounts to harassment on the part of the Inspector which can be removed by this, Court in exercise of its constitutional jurisdiction.

7. In view of the above considerations the action of the Central Board of Revenue followed by the Inspector, Central Excise and Lands Customs are devoid of lawful authority. They are, therefore, declared to be of no legal effect. The writ petitions as allowed with costs. Petitions accepted.